A closer look at the growth side of the market with Vincent Gallagher, Needham Growth Fund Portfolio Manager, and CNBC's Erin Burnett

For the tech sector, the question is how to turn gadgets into real growth. Vince Gallagher – portfolio manager at Needham Growth Fund – was a guest on “Squawk on the Street.” He said many companies (especially in tech and healthcare) are preparing for a slow first half of 2007 – but an accelerated second half of the year. For Gallagher and his firm, the challenge for 2007 is “buying tech at the right price.”

The much-beleaguered Motorola is Gallagher’s number one holding - and he’s sticking to it. Gallagher says despite the stock’s sluggish performance he believes in the company’s management and says the mobile phone giant has good products on the horizon. The stock might not see $25 for another 12 to 18 months, Gallagher says, but he isn't selling.

Gallagher admits he missed the boat with Apple . He says he eyed the stock back when it was around $13 or $14 – and now as it skyrockets to an all-time high – Gallagher has no intention to get in. “It’s too rich for us now,” he says.

And one final area where Gallagher sees growth potential: business services software. Companies like Autodesk – which provides software for companies in fields ranging from manufacturing to media to infrastructure - and CoStar Group – which provides commercial real estate information - will grow even in a slowing economy, Gallagher says, and are must-haves for his portfolio.